New York has no general research credit open to all taxpayers. It has two R&D credits, both tied to certification by Empire State Development (ESD): the Excelsior research and development tax credit, part of the Excelsior Jobs Program, and the Life Sciences Research and Development Tax Credit.
At a glance
- Jurisdiction: New York (NY)
- Credit name:
- Excelsior Research and Development Tax Credit (Economic Development Law §355(3); Tax Law §31; claimed on Form CT-607/IT-607)
- Life Sciences Research and Development Tax Credit (Tax Law §43; claimed on Form CT-648/IT-648)
- Administering agency: ESD admits and certifies participants and issues the certificate of tax credit. The NYS Department of Taxation and Finance (DTF) processes and audits the claims.
- Rate(s) and base:
- Excelsior R&D: 50% of the federal research credit attributable to research expenditures in New York, capped at 6% of qualified New York research expenditures (7% for qualified semiconductor supply chain projects; 8% for qualified green and Green CHIPS projects).
- Life sciences: 15% of qualified New York R&D expenditures (20% for companies with fewer than 10 employees in the tax year). Contract research expenses do not qualify.
- Refundable? Yes, both credits are fully refundable.
- Transferable? No.
- Carryforward: Not applicable. Both credits are refundable.
- Annual cap / proration:
- Excelsior: limited to the amounts in the participant's ESD preliminary schedule of benefits, generally for up to 10 years (up to 20 years for Green CHIPS projects), and subject to the program's statewide annual caps.
- Life sciences: $500,000 per company per year, for up to 3 consecutive years ($1.5 million lifetime), within a $10 million statewide annual allocation. Applications are processed in filing order while funds last.
- Pre-approval / application and deadline: Required for both.
- Excelsior: you must be admitted to the program under an agreement with ESD and receive an annual certificate of tax credit after meeting job and investment commitments.
- Life sciences: you must be certified by ESD as a new life sciences company and apply separately for each of the up-to-3 years.
- Forms: Excelsior credit on Form CT-607 (corporations) or IT-607 (individuals, partnerships, fiduciaries). Life sciences credit on Form CT-648 or IT-648. Attach the ESD certificate of tax credit.
- Sunset / recent changes: No life sciences credit is allowed for taxable years beginning on or after January 1, 2028 (Tax Law §43). There were no enacted changes to either credit in 2026. The FY 2027 budget (Chapter 59 of the Laws of 2026, Part F) decoupled New York from federal §174/§174A expensing, starting with tax years beginning on or after January 1, 2025.
What it is
- Excelsior R&D credit: one of five refundable credits for businesses admitted to the Excelsior Jobs Program, which serves strategic industries that commit to creating jobs and making investments in New York.
- Life sciences credit: a refundable credit for new life sciences companies doing research, development, technology transfer or commercialization in New York.
Who can claim it
- Excelsior: participants in the Excelsior Jobs Program that meet the program's job and investment thresholds for their strategic industry and hold an ESD certificate of tax credit for the year.
- Life sciences: new businesses that devote most of their efforts to research, development, technology transfer or commercialization in a life sciences field, that ESD has certified as qualified life sciences companies, and that have qualified R&D expenditures in New York.
How it is calculated
- Excelsior R&D credit:
- Compute the federal §41 credit attributable to research expenditures in New York.
- Take 50% of that amount.
- Limit the result to 6% of qualified New York research expenditures (7% or 8% for qualifying semiconductor supply chain, green or Green CHIPS projects).
- The credit cannot exceed the amount on the ESD certificate.
- Life sciences credit:
- Multiply qualified New York R&D expenditures by 15%, or 20% if the company had fewer than 10 employees in the tax year.
- Limit the credit to $500,000 per year and to the ESD certificate amount.
- The credit is available for the first year the company meets the criteria and the 2 following years.
How to claim it
- Excelsior: apply through your ESD Industry Director or regional office, or through the Consolidated Funding Application. Sign the participation agreement and meet annual job and investment commitments. Then get the annual certificate of tax credit and claim the credit on Form CT-607 or IT-607.
- Life sciences: apply to ESD each year by sending a signed application and the Excel template to the program email address. Get the certificate of tax credit, which states the amount and the tax year. Claim the credit on Form CT-648 or IT-648.
- Attach or keep the ESD certificate with the return, and refer to it in the claim.
Recent changes
- No enacted changes to the Excelsior R&D credit or the life sciences credit in 2024–2026.
- A9610 (2026): would raise the Excelsior R&D cap from 6% to 20% of New York research expenditures. It was introduced January 21, 2026 and is still in the Assembly Economic Development Committee.
- FY 2027 budget (Chapter 59 of the Laws of 2026, Part F): New York decouples from federal expensing of research or experimental expenditures under IRC §174/§174A for tax years beginning on or after January 1, 2025. Corporate and personal income taxpayers add back the federal deduction and amortize post-2024 research expenditures over 60 months for New York purposes. New York City (Part G) also decouples for domestic research expenditures under its business taxes. This affects how research costs are deducted, not the credits themselves.
Likely examiner questions
These questions illustrate what an examiner may ask about this credit. They are drafts for illustration and should be reviewed by a specialist before use. Most state claims also face standard questions: where the research was physically performed, how wages, supplies and contract research were apportioned between New York and other locations, how New York amounts reconcile to federal Form 6765, the New York credit and carryforward schedule for each year claimed, and whether the claiming entity is the one subject to New York tax.
- Can you provide the ESD certificate of tax credit for each year claimed? Does the amount claimed match it?
- Excelsior: how was the federal credit attributed to New York research expenditures, and how was the 6% (or 7% or 8%) ceiling applied?
- Excelsior: did you meet your job and investment commitments for the year?
- Life sciences: how many employees did you have in the tax year (this sets the 15% or 20% rate), and do the qualified expenditures exclude contract research?
- Life sciences: is this year within the 3-year window, and is the company still a "new business"?
- Are refunds reconciled to the certificate and the return?
Common weak spots
- Claiming without a certificate, or claiming more than the certificate amount.
- Attributing out-of-state research to New York.
- Counting contract research expenses in the life sciences credit.
- Missing Excelsior job or investment commitments, which can lead to loss or recapture of credits.
- Claiming life sciences credits for taxable years beginning in 2028 or later.
Next steps
- Run a mock audit for New York
- Official source: Empire State Development, Excelsior Jobs Program (opens in a new tab)
- Run the eligibility checker
- Book a scoping call with Swanson Reed (opens Swanson Reed's booking calendar in a new tab)
- Contact us: +1 (469) 206-4335 or hello@creditarmor.ai
Important
This page is general information, not tax advice. Rules change; confirm current requirements with the state revenue agency or a qualified tax professional. creditARMOR is a free service. Passing this mock audit does not guarantee that your claim will pass an IRS or state examination. If needed, Swanson Reed can assist you with representation before the IRS. creditARMOR and TaxTrex are products of Swanson Reed.